Economy

CBA eyes a stake in Symond’s Aussie

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The Commonwealth Bank could be set to buy up to 40% of John Symond’s Aussie Home Loans, in a sign that banks are now looking for bargains as the financial sector continues to wobble.

The Commonwealth Bank could be set to buy up to 40% of John Symond’s Aussie Home Loans, in a sign that banks are now looking for bargains as the financial sector continues to wobble.

According to newspaper reports today, CBA is in discussions with Aussie to take a stake of between 30% to 40% in the company at a price that would value it at around $200 million.

Aussie was a pioneer in non-bank mortgage lending, building up a strong position in the sector and turning Symond into one of Australia’s most high profile entrepreneurs.

But Aussie was this year caught in the credit squeeze that swept the non-bank mortgage sector, leaving it struggling to obtain the wholesale funding it needed to grow its mortgage book.

Symond announced last week that he was stepping back from Aussie’s day-to-day operations and moving into the executive chairman’s role to allow him to better drive the firm’s strategic direction.

Meanwhile, listed mortgage broker Mortgage Choice has posted a slight fall in net profit for 2007-08, from $19.6 million to $19.3 million.

Mortgage Choice chief executive Paul Lahiff has described the result as “solid” given the pressure the sector has been under as a result of the credit crunch and several banks withdrawing products from the broker channel.

The company’s loan book grew by 12.2% during the period, and stood at $33.27 billion at 30 June 2008.

“The fact that it outpaced [banking] system growth of 10.1% in such a difficult market was a pleasing outcome.”

The company is confident that the economics fundamentals underpinning the housing sector are strong and Lahifff says any reduction in official interest rates should improve the outlook.

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